Yellow Lights: KPIs to Guide Your Growth
Optimal growth requires the daily and weekly process of checking gauges and fine-tuning to improve results
By Eric Herman, PT
Many private practice owners believe if their practice is not growing, it is regressing. Physical therapy is a growing industry nationwide which means our businesses need to continue to grow year-over-year to stay relevant in our markets. A challenge is balancing the desire for growth with the right opportunities while maintaining quality patient care and keeping high levels of team engagement.
How would a practice owner know their upward trajectory could be faster than they are ready for, or maybe worse, the growth is too fast to sustain, and disaster is ahead? When cars approach an intersection, a traffic light shows yellow as a sign of caution. Even if a few of us step on the accelerator, the intended response is to slow down! Just like a yellow traffic light, owners will benefit from creating a process to monitor “yellow” caution lights along the way that indicate slight adjustments or coaching needs to be made. The key is to identify when the practice is starting to drift off course before the practice is completely off course.
BUILD A FOUNDATION OF CLEAR TARGETS
First, owners need to determine which key performance indicators (KPIs) are most meaningful for their practices and then establish targets for those KPIs. To ensure a private practice is fulfilling its mission for our communities and our teams, KPIs should speak to Patient Experience, Patient Outcomes, and Team Experience in addition to Financial Success. Success in each of these categories is necessary for a healthy journey so the growth journey never ends and is paced optimally. If a practice exceeds its Net Income targets at the expense of Patient and Team targets, the ability to continue growing may be sacrificed by a disengaged community and team members. Likewise, if a practice exceeds Patient Experience and Outcomes targets at the expense of Net Income, growth will be stunted by a lack of funds and resources.
Notice these KPIs are results — lagging indicators which cannot be changed once reported. They will tell an owner when they’ve gone off course or remained on course, but they will not tell an owner when they are on an optimal trajectory. Owners are best served to act on lead measures which allow adjustments to be made to fine-tune our trajectory to optimize our growth.
Establishing daily and weekly processes to identify leading indicators drives the results. Let’s look at a few key areas and how to respond when they may be turning “yellow.”
YELLOW LIGHT: DECREASING PATIENT ENGAGEMENT
One primary patient outcome KPI in our practice is Visits per New Patient. We know a patient completing their plan of care is directly related to their outcome and experience. A strong leading indicator to improve Visits per New Patient is “Days Scheduled at Eval.” Focusing on scheduling as a leading indicator holds our teams accountable to actions that will improve results and drive optimal growth. Clinic leaders at each office have a weekly process to monitor scheduling habits for each new evaluation performed in their office. This process check gives us the ability to forecast expected results. If a patient is not scheduled consistently, we are unable to support them in their POC journey to get the outcomes our community deserves. If growth exceeds the capacity of each clinician, it is easy to feel too busy or lose track of a patient. Using “Days Scheduled at Eval” serves as a yellow light that patient engagement is drifting off track.
YELLOW LIGHT: DECREASING PATIENT SATISFACTION
Another patient experience KPI is Net Promoter Score (NPS) response rate. This is definitely a lag measure even when the survey is sent just a few days after the evaluation. There are a couple lead indicators to having success with this KPI. The first is an accountability check within our teams informing each patient they will be receiving a survey and we appreciate their feedback on how we are performing. A second lead indicator used successfully in our practice is what we call “White Board Wisdom” (WBW) at a patient’s initial evaluation. The number one positive NPS attribute recognized by our community on NPS has been the knowledge shared by their therapist. WBW involves the therapist taking time with each patient to outline a clear roadmap to successfully complete the patient’s journey. When a practice is growing quickly, providers are susceptible to paying less attention to detail and a decrease in WBW indicates patient satisfaction may be in the “yellow.”
YELLOW LIGHT: DECREASING TEAM ENGAGEMENT
Poor clinician retention would definitely curb growth potential. All the shuffling around in the PT world over the last two years has made it difficult for many practices. Clinician Retention Percentage is another lag measure that is likely to decrease in a practice growing too quickly or growing revenue at the expense of supporting the team. Team Engagement is a clear lead indicator to predict clinician retention but can be tricky to measure objectively. The number of planned team events and the number of educational opportunities that require sign-ups and commitments in advance provide objective measures. An employee engagement survey can be another valuable leading indicator with objective data. On the qualitative side, clinic leaders can gauge and help create the local buzz and excitement behind planned events. If teammates are not signing up or showing up, we need to work on relationships within our walls.
YELLOW LIGHT: LOSING FINANCIAL STABILITY
The lack of an engaged clinical team would certainly limit a practice’s ability to take great care of patients. As mentioned above patient and team engagement must be balanced with financial and business success of the practice. Net Income is a top measure for business growth. When Net Income is reported, there is nothing that can be done to change it making it a lag measure. However, waiting for a month or quarter-end report to determine our growth success is trouble.
Utilizing procedures per visit as a lead measure provides an indication of how much direct time clinicians are able to spend with each patient. Time spent and appropriate billing and coding forecast revenue per encounter and tend to be an impactful lead indicator clinicians can often influence. Revenue collection teams utilize lead indicators to identify issues with our revenue coming in matching our services provided and is filtered by insurance line and over-the-counter payments. Ensuring the daily revenue average look backs at one, two, and four weeks follow the visit trend indicates visits are turning into dollars properly. If there are any discrepancies between visit trends and the daily revenue trends, the billing team can make adjustments to keep the business on track.
Yellow lights exist to be helpful to drivers and to private practice owners. Optimal growth requires the daily and weekly process of checking gauges and knowing how to make fine-tune adjustments to improve results. When done well, growth can be accelerated at a fast pace without jeopardizing our services, team, or business.